Waste Water And Public Private Partnerships

City staff released a recommendation last week that Regina should go with a Public Private Partnership for the upgrade to our waste water treatment plant. Greg reported on that here.

So what do you think? Should I bother covering this story at all? Because I’m pretty sure I can tell you how things are going to turn out right now. A bunch of people will show up to council and object to using a P3 for the treatment of waste water. Council will object to the objections, saying, “What would you have us do? If we want to apply for funding from the federal government, we have to go with a P3. It would be fiscally irresponsible to do anything else.” Then they’ll make some comment about the public being misinformed and in the end there will be a majority vote in favour of the P3 funding plan.

I’m inclined to call this a done deal, if that’s okay with you.

All I’m hoping is city staff have actually done their due diligence with this P3 plan — and I’m sure council will say that they have — because if the stadium P3 goes south, we could be stuck with a half-finished stadium but the Riders already have a stadium so they won’t even miss a game. But if our waste water treatment plant doesn’t work out as planned, people downstream from us could wind up drinking our poop. And I suspect they might sue over that.

But why am I even pondering the possibility of this P3 not working out? Well, I attended the National Infrastructure Summit that the city of Regina put on last year and at it I asked Paul Moist, president of CUPE Canada, about the fact that the city was considering a P3 for our waste water treatment plant, and here’s what he said…

Moist also participated in a panel discussion on P3s during the summit and in response to a question about the need for due diligence in negotiating P3 agreements, he made reference to the Hamilton case.

In a CUPE-published report on P3s by University of Manitoba economics professor, John Loxley, there is even more detail on that Hamilton-Wentworth waste water treatment plant. In a section on how P3s can impact workers, Loxley writes,

Often, when the private sector claims to be more efficient than the public sector, this really means cutting labour costs by laying off workers, using non-unionized instead of unionized labour, cutting wages, pensions and other benefits, or reducing hours or conditions of work. This is particularly common in service delivery P3s, where the private partner is handed a budget or part of a budget to deliver services previously delivered by the public sector in return for a share in any savings it can generate.

In the case of the Hamilton-Wentworth water and sewage system, the private corporation laid off half the staff, reducing the operating budget by close to 40 per cent. The result was a catastrophic reduction in service quality.

And later, in a section on how P3s affect communities,

The workforce cuts in the Hamilton-Wentworth water and sewage project led to untreated sewage polluting Hamilton harbour. The P3 contract was so poorly put together that the regional government ended up paying the cleanup costs.

Later still, Loxley writes,

P3s also severely restrict democratic accountability by tying the hands of future municipal governments, as far ahead as 30 years or more. Even more troublesome, promoters of P3s in Canada have on occasion made contributions to the political campaigns of sympathetic councillors, as in the case of the Hamilton-Wentworth water and sewage system and, apparently, the Lansdowne Park development in Ottawa. Though not illegal, such contributions are highly questionable.

So, P3s and waste water… sounds like they can be a combination fraught with complications. Be curious to see what the discussion around this ends up being like. Guess I’ll write about it after all.

And in case you’re interested, I recorded all of Paul Moist’s introductory remarks at the P3 panel at the 2012 NIS. I’ll include them below.

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Author: Paul Dechene

Paul Dechene is 5'10'' tall and he was born in a place. He's not there now. He's sitting in front of his computer writing his bio for this blog. He has a song stuck in his head. It's "Girl From Ipanema", thanks for asking.
You can follow Paul on Twitter at @pauldechene and get live updates during city council meetings and other city events at @PDcityhall.
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Thank you for writing on this Paul. Definitely food for thought, and it’s kind of ironic that this gentleman spoke at the NIS which was hosted in Regina, and yet, it seems his advice is falling on deaf ears at City Hall??

I’m still of the opinion that the WWTP already meets and exceeds all current and future regulations, and this $225M project is a needless project done as a favour to certain folks in Regina. UNTIL the City of Regina can provide documentation to support their public reasoning, I will have to remain of this opinion. Is it really so much to ask for backup to an argument that sounds an awful lot like propaganda?

thanks, Paul, for the article. I do think as well that there is unlikely to be enough resistance to a water p3 to stop this disastrous idea. Common sense remains elusive around city hall. It looks we will go bankrupt as a city AND fail on adequate water treatment within a few years. pretty sad.

I feel sorry for Paul D having to use his excellent journalistic skills for predictable crystal ball city hall dull drama movies. I think he should be promoted to do cover better stories. He is so right on the $ on what went down at Regina city hall. Only a small vocal minority oppose this. P3’s aren’t all bad. And as Paul already mentioned to get any guaranteed federal funding, it has to be the p3 model.
I wonder why only certain unions like CUPE are opposed to P3s? What motives do they have? Non unionized? Pretty self explanatory.
Tell you what Mr. Moist, I’ll support keeping things publicly owned and controlled without any unions involved. That way, no private companies and no unions have any background influence with each of their own interests or agendas.

1) Marc S, the idea of going P3 on a new stadium was explored. As we already know, P3’s involve some federal funding. Since the fed’s made it clear no funding would be available for new stadiums of any kind while they tackle with balancing the federal budget, that idea was dropped.
2) Ron, they already looked into the idea of renovating Taylor Field. Turns out there are some parts of that stadium can’t be renovated without huge overhead costs to the structure itself. That mostly pertains to old stairwells and other areas. It’s time for a new stadium.
3) Chad always hangs around…this fly never buzzes away.
4) Charles, why this fear of going of a city going bankrupt? Regina is in far better shape compared to some major big US cities.

Should it be considered who the private partner is? I ask because this seems a deal fit for a pension fund or insurance company. Why don’t government pensions plans invest in local infrastructure?

Also there are two deals here – one to operate and one to finance and build. The latter sounds acceptable if it’s a good deal for the city. The city’s alternative is probably something like a municipal bond issue.

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